November 20, 2018 / 9:42 AM / 5 months ago

RBI move to boost Indian banks' lending ability by up $42 billion - sources

FILE PHOTO: A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi, India, November 9, 2018. REUTERS/Altaf Hussain/File Photo

MUMBAI (Reuters) - The Reserve Bank of India estimates that Indian banks will have capacity to lend an extra 2.5 trillion rupees to 3.0 trillion rupees ($35 billion to $42 billion) over the next year after it decided to relax a deadline for lenders to boost capital ratios, two sources aware of discussions on the matter said on Tuesday.

The RBI agreed to extend a deadline for lenders to further lift capital conservation buffers, by a year to March 31, 2020, at its board meeting on Monday.

The relaxation will also reduce banks capital requirements by about 300 billion to 350 billion rupees of capital, the two sources said, adding that the numbers were shared by the RBI at the board meeting.

Reporting by Suvashree Dey Choudhury in MUMBAI and Manoj Kumar in NEW DELHI; Editing by Euan Rocha & Simon Cameron-Moore

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